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Palm Reports 3% Revenue Increase

9/22/2003 08:22:00 AM Eastern

Milpitas, Calif. - With both its Palm Solutions Group and PalmSource operating units demonstrating 'continued strong execution' as well as year-over-year revenue growth, parent Palm recorded a 3 percent increase in fiscal first quarter revenue, hitting $177.4 million, up from $172.3 million in the year-ago period.

Palm substantially reduced its first quarter net loss, down to $21.7 million, compared with a loss of $258.7 million in the same three months in 2002.

Excluding the effects of amortization of intangible assets, separation costs and restructuring charges, Palm reported a first quarter net loss of $16.9 million, compared with a loss of $36.4 million in the same period a year earlier, which also excluded charges.

Palm reported improved gross margin for the three months, ended Aug. 31, a 400-basis-point climb, to 34.7 percent, compared with 30.7 percent in the first quarter of last year.

Separating the operating units, the Palm Solutions Group, responsible for Palm-branded handhelds, reported revenue of $168.6 million in the first quarter, up from $164.7 million year-on-year. Segment loss before income taxes hit $16.5 million, about half the loss of $32.4 million recorded in the same period in 2002.

First quarter revenue for the PalmSource operating unit, responsible for developing and licensing the Palm OS operating system software for handheld computers, climbed to $17.1 million, up from $15.1 million in the same three months a year ago. The segment reported a loss before income taxes of $2.8 million in the first three months, compared with a loss of $10 million year over year.

Palm shipped about 645,000 Palm handhelds in the first quarter, bringing the total number shipped to date to 22.9 million. Including all licensed Palm Powered handhelds, the company shipped 1.2 million in the first three months, for a total to date of 30.1 million.

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